DICARLO v. ST. MARY HOSP.
530 F.3d 255 (2008)
United States Court of Appeals, Third Circuit.
Submitted Under Third Circuit L.A.R. 34.1(a), March 11, 2008.
A motion for judgment on the pleadings will be granted, pursuant to Fed. R.Civ.P. 12(c), if, on the basis of the pleadings, the movant is entitled to judgment as a matter of law. Allah v. Brown,351 F.Supp.2d 278, 280 (D.N.J.2004). The court will accept the complaint's well-pleaded allegations as true, and construe the complaint in the light most favorable to Count 1: Breach of Contract
the nonmoving party, but will not accept unsupported conclusory statements. Id.
At the outset the Court must reject Defendants' argument that Plaintiff's breach of contract claim fails because, not having paid the hospital charges, Plaintiff has suffered no damages. To have standing to assert a breach of contract claim, plaintiffs need not "wait until lawsuits against them were filed or collection agents began harassing them or their credit files were red-flagged." Puritt v. Allstate Ins. Co.,284 Ill.App.3d 442, 219 Ill.Dec. 845, 672 N.E.2d 353, 356 (1996). The expense is incurred, whether paid or not, at the time the patient enters a hospital with the understanding that he or she is liable for all or part of the charges for the services to be rendered. Dillione v. Deborah Hosp.,113 N.J.Super. 548, 555-56, 274 A.2d 597 (App.Div.1971).
It is Plaintiff's contention with respect to the contract claim that the contract between himself and St. Mary's contained an open price term and that, therefore, the law implies an agreement to pay only a reasonable price. In light of prices that uninsured patients and medicare, medicaid, and charity patients pay, Plaintiff argues that the charges he was required to pay were unreasonable on their face and an inquiry into the extent of their unreasonableness is required.
Plaintiff cites Restatement (Second) of Contracts, § 204, which provides that "[w]hen the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term which is essential to a determination of their rights and duties, a term which is reasonable in the circumstances is supplied by the courts." See also NBCP Urban Renewal P'ship v. City of Newark,17 N.J.Tax 59, 73 (Tax 1997), aff'd,17 N.J.Tax 505 (App. Div.1998) (citing Tessmar v. Grosner,23 N.J. 193, 201, 128 A.2d 467 (1957)). Plaintiff cited out-of-state cases in which the courts held that an agreement that a hospital patient signed that obligated the patient to pay the hospital's "charges" or "regular charges" failed to fix a price and a reasonable price would be implied, e.g., Doe v. HCA Health Servs. of Tenn.,46 S.W.3d 191 (Tenn.2001); Payne v. Humana Hosp. Orange Park,661 So.2d 1239 (Fla.1995).
While Plaintiff's contentions have facial persuasiveness, they fail to take into account the peculiar circumstances of hospitals, such as St. Mary's, and the bearing these circumstances have upon the interpretation of contracts between a patient and the hospital. St. Mary's has a uniform set of charges (casually known as the "Chargemaster") that it applies to all patients, without regard to whether the patient is insured, uninsured, or a government program beneficiary. As Plaintiff in his complaint and in his briefs recites, St. Mary's accepts a variety of discounted payments in different situations. It negotiates differing discounts with some managed care payors and insurance companies. It accepts discounted payments if the patient is covered by a government program that legislatively imposes discounts. It has provided discounts to uninsured patients based on demonstrated financial need pursuant to its Charity Care policy and the requirements of the New Jersey Charity Care Program, N.J.A.C. § 10.52-11.8, providing free care to those demonstrating income up to 200% of the Federal Poverty Level and providing services at a reduced rate for patients with incomes greater than 200% but not less than 300% of the Federal Poverty Level. All of these charges and computations were based on St. Mary's uniform set of charges.
The form signed by Plaintiff read, in relevant part, "I also guarantee payment of all charges and collection costs for services rendered...." (Answer ¶ 68, Ex. C(1)). The Court finds that in the context of this case, the price term was not in fact open, and that "all charges" unambiguously can only refer to St. Mary's uniform charges set forth in its Chargemaster. If the price term is deemed unambiguous, a court may not use extrinsic evidence to determine the parties' intent or make a different contract for the parties than the one already made. Schor v. FMS Fin. Corp.,357 N.J.Super. 185, 191-92, 814 A.2d 1108 (App.Div.2002). A party cannot introduce extrinsic evidence "for the purpose of modifying or enlarging or curtailing its terms," and may only employ such evidence "to aid in determining the meaning of what has been said." Driscoll Constr. Co. v. State Dep't. of Transportation,371 N.J.Super. 304, 853 A.2d 270 (2004) (quoting Casriel v. King,2 N.J. 45, 51, 65 A.2d 514 (1949)).